Professional Documents
Culture Documents
Session :- (2014-2015)
Submitted To:
Submitted By:
VASEEM ANSARI
(Faculty of Management)
DECLARATION
.
I VASEEM ANSARI Student of MBA- IV Sem hereby declare that the
dissertation entitled COMPARATIVE STUDY AND DISTRIBUTION CHANNEL
OF HINDUSTAN UNILEVER (HUL) AND IMPERIAL TOBACCO COMPANY
(ITC) that is being submitted by me in partial fulfillment of the requirements for the
award of the degree of MBA from U.P.T.U, Lucknow is a record of bonafied work
carried out by me.
Date:
VASEEM ANSARI
Place:
(Signature of the student)
ACKNOWLEDGEMENT
Firstly, I am grateful to Ms. Preeti Singh, Asst Professor, VIT, Meerut , for his
continuous and deliberate discussion on the topic and indeterminable burden taken by him
in helping me during the research report.
Last, but not least I am thankful to my parents & my brothers who motivated me
throughout this work, the preparation of this report would not have been an easy task
without the help and support of my parents & my brothers.
I am pleased to say that the whole report is just the presentation of the facts that have
been found during the research through different sources and its each sentence is an exact
representation of the information obtained thereof.
I hope that I have manifested my sincere attempts to represent all the information and
other things to the best of ability.
(VASEEM ANSARI)
TABLE OF CONTENT
CONTENTS:-
PAGE NO:-
EXECUTIVE SUMMARY
INTRODUCTION
6-10
11-50
DISTRIBUTION SEGMENTS
51-65
RESEARCH METHODOLOGY
66-69
70-79
DESCRIPTIVE WORK
80-95
FINDING
96-97
LIMITATION
98-99
100-102
BIBLIOGRAPHY
103
ANNEXURE
104-105
EXECUTIVE SUMMRY
The main objective of the research is to get the full knowledge of the distribution
network of the products of the Hindustan Uni Lever (HUL) and Imperial Tobacco
Company(ITC) and how they are using the distribution network as a key differentiating
factor from its competitors. This is also to find the preferences of customer towards the
food products of both the company, there market knowledge, product information,
Information about the presence of the rivals of HUL and ITC and all the other options
they have in the market. HUL and ITC are also looking to tap the market in rural sector,
so they also taking into consideration the needs and wants of the people there. Also to
study the different promotional tools used by them to attract the new customer and to
keep using the product by the existing customer.
INTRODUCTION
Ordering
Storage
Display
Promotion
Selling
Information feedback
Market Factor
Producer Factor
Product Factor
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Distribution is all about getting the product/services to the right people at right
time. How the distribution channel is working in FMCG sector. In FMCG sector
work of distribution channel is not an easy job. How major players like HUL and
ITC maintain good supply of its product/services to its different channel.
It is very much required to make available of the product to its final consumers.
Sound distribution channel help any organization to grow very fast .Factory is the
place where any product is manufactured, but without help of a good distribution
channel it is useless to produce.
To understand bathing soap and shampoo industry, classification listing of
companies with their brands, & SKUs, margin calculation offers. Top brands,
retail/WD buying pattern & stocking, Supply chain, Order capture-Delivery
model, types of outlets-convenience & Grocery, Key accounts, Visibility solutions
of different companies.
Distribution-activities that make products available to customers when and where
they need them.
A channel of distribution or marketing channel is a group of individuals and
organizations that directs the flow of products from producers and customers.
OBJECTIVE OF REPORT:
To study the different food product of both the company.
To find out the distribution strategy of HUL and ITC.
To find out the demand and supply relation in HUL and ITC.
To Know the Comparative position of HUL in comparison to ITC.
To study the satisfaction level of users.
the country and is creating employment for three million people, especially in
small towns and rural India.
With the help of my study company may be able to know in which area they are
lacking behind to give tough competition to Hindustan Unilever Limited
in the
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COMPANY &
ITS PRODUCTS
OVERVIEW
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Our mission
Unilever's mission is to add Vitality to life. We meet everyday needs for nutrition,
hygiene, and personal care with brands that help people feel good, look good and get
more out of life.
HINDUSTAN Unilever (HUL) is the largest pure-play FMCG Company in the country
and has one of the widest portfolio of products sold via a strong distribution channel. It
owns and markets some of the most popular brands in the country across various
categories, including soaps, detergents, shampoos, tea and face creams.
PERFORMANCE:
After stagnating between 1999 and 04, the company is back on the growth track. In the
past three years, HULs net sales have witnessed a CAGR of 11%, while net profit has
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posted a CAGR of 17%. The company is set to gain further momentum, given the revival
of consumer spending. HUL sells products at different price points straddled between the
entire value chains. In the past few years, it has diversified into processed foods, icecreams, water purifiers and specialized chemicals. But home and personal care (HPC)
continues to remain the bread & butter segment for the company. This division accounted
for 72% of HULs revenue and 91% of its profit (before interest and tax) during the year
ended December 07. So, it wont be wrong to call HUL a personal care major.
GROWTH DRIVERS:
The Company has been launching new products and brand extensions, with investments
being made towards brand-building and increasing its market share. HUL is also
streamlining its various business operations, in line with the One Unilever philosophy
adopted by the Unilever group worldwide. Introduction of premium products and addition
of new consumers via market expansion will be HULs growth drivers.
FINANCIALS:
HULs net sales have recorded a CAGR of more than 11% over the past three years, while
its net profit has posted a CAGR of 17% during the same period. While its sales have
maintained a secular growth trend, profit margins have shown an erratic trend during the
period. High dividend yield, steady growth and strong market standing in its product
categories have enabled HUL to command premium valuations, compared to other
FMCG companies.
RISKS:
Being an MNC operating in India, HUL is more conservative in its strategies than its
Indian counterparts. Moreover, given increasing competition, it faces the risk of being
overtaken by domestic players in various categories. Prolonged inflation may lead to
margin contraction, in case HUL is not able to pass on this burden to consumers. The
companys large size also poses a problem, since it does not give HUL the agility to
address the competition it faces from national and regional players.
TO SUM IT UP:
HULs up-and-running business model is a treat for investors seeking exposure in the
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FMCG segment. The company has delivered in the past and has the potential to do better
in future. In the small and medium term, HUL is a better bet than ITC.
3 Roses
To keep a relationship going, every young couple needs a little time to talk.
The perfect colour, strength and aroma of 3 Roses create that perfect tea moment where
couples can spend time talking about the everyday issues that matter to them.
Whether it is playful banter, a little mischief or serious conversation, in the final
reckoning, its these little moments and conversations that make relationships stronger.
Key facts
3 Roses is a 30 year old regional brand and is the market leader in Tamil Nadu.
It has two functionally differentiated variants - 3 Roses Natural Care and 3 Roses
Mind Sharp.
3 Roses Regular
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Annapurna
Annapurna Atta is aimed at helping the homemaker provide wholesome, tasty nutrition to
her family.
Launched nationally in 1998, Annapurna Atta is aimed at helping the homemaker provide
wholesome, tasty nutrition to her family.
Annapurna Farm Fresh Whole Wheat atta is made from premium quality wheat grains.
These grains are ground using advanced technology so that the Atta absorbs more water
while kneading, makes rotis stay soft for a longer time and retains the nutrition of
vitamins and minerals of the wheat grains.
Annapurna was awarded the prestigious Awaaz Consumer Award for the most preferred
brand of atta for two successive years in 2006 and 2007
Annapurna Atta
Anna Pack3
Red Label
The brew that bonds.
The taste of Red Label brings alive the little moments that bring us closer to people we
love. It is the simple act of sharing a cup of Red Label that often adds magic to everyday
moments, strengthening the relationships that matter most to us.
Life is lived in those moments, one sip at a time.
Key facts
Red Label is a 105 year old brand and has tremendous equity and heritage in the
Indian market.
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It has both leaf and dust variants, as well as a health and immunity variant Red Label Natural Care.
It is now proven that regular consumption of 3 cups of Red Label Natural Care
every day can enhance one's immunity and help one fall ill less often.
Red Label holds the Guinness Record for the worlds largest tea party.
Red Label
Taaza
The great refreshment of Taaza inspires women to have an identity beyond their homes
and to refresh their lives.
Many young women in emerging India live life bound within their roles as a mother, wife
and daughter in law. In the process, they lose their own identity. However, a changing
India and examples of women achievers as portrayed by media, is leading to an
awakening of her desire to carve out an identity for herself. She is however limited by her
own inhibitions and a sense of inertia.
Taaza recognizes this latent need and also believes that every woman has innate talent.
The fresh green leaves in Taaza give her amazing refreshment that inspires her to realize
her talent. Taaza is her ally and confidant.
Key facts
Taaza is a 20 year old brand with strong presence in North & West India.
It is the 3rd largest tea brand in the country with a portfolio spanning in both leaf
and dust segments.
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Taaza
Taaza Thanda
Taj Mahal
A taste for the finer things in life.
Crafted from carefully selected tender leaves from Indias finest tea gardens, the lingering
aroma of Taj Mahal always has an impact. When a cup of Taj is served, compliments
follow.
Taj Mahal is not just a cup of tea, it is a sensory experience.
Key facts
Ustad Zakir Hussain, the tabla maestro was the brands ambassador for almost two
decades, exemplifying both discernment as well as the pursuit of excellence.
Taj Mahal since 2007 has Saif Ali Khan as its ambassador, a relevant choce for
todays Indian
Taj Mahal is the most premium brand of tea in the Indian market.
It was the first brand to launch tea bags and is the only tea brand in India to be
sold in vacuum sealed packs.
Taj Mahal
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Bru
Some moments in life are special and close to the heart. Bru makes these moments with
loved ones even more magicalIts Indias largest coffee brand that offers a range of
products in Instant coffee, Conventional coffee and premixes....Its rich aroma and unique
blend makes every moment come alive
In the year 1962 Brooke Bond India creates the branded roast and ground coffee segment
launching Deluxe green label. 1968 gave birth to the first Instant coffee chicory mix
under the brand name BruEver since its inception, Bru has been on a constant endevour
to bring better products and formats to the consumer with every passing year. With the
launch of cappuccino in 2007 Bru was a pioneer to launch instant coffee premixes in
India for the youth. Brus specially selected and freshly roasted coffee beans offer a great
cup of aromatic coffee that makes those moments of genuine warmth and happiness even
more special
Key Facts
Enjoys a rich heritage, came into existence in 1962 under the brand name Deluxe
green label
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Kissan
Kissan acts as a catalyst, easing stressful moments at the dining table. With Kissan, good
food is loved not shoved!
Kissan wants to be the brand which will help dissolve tension between mother and the
family during informal good food moments. Kissan acts as a catalyst, easing stressful
moments at the dining table. With Kissan, good food is loved not shoved!
Key facts
Kissan Jam
Kissan Juice
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fits in a healthy diet and has a nutritional composition in line with international
recommended dietary intakes for balanced nutrition for school children. The bad
nutrients like sugars, salt, trans fat and saturated fat are kept as low as possible and
adequate quantities of all the key nutrients which support the development of the brain
(like Iodine, Zinc and Omega 3 fatty Acids and B Vitamins), in particular are added. The
products are also available in formats which would easily fit into the normal meal
moments of a child and could replace the unhealthy snacks.
Key facts
Knorr
Knorr helps families make meal times special, nutritious, tasty and healthy.
It is not wrong to say that the category of soups was launched by Knorr in India. The
Knorr range of soups is available in a number of tasty and exciting varieties. There is a
flavour to literally suit every taste palate; the Classic range of soups with flavors like
Thick Tomato, Mixed Vegetable and Chicken Delite, the Oriental range with flavours like
Sweet Corn Vegetable, Sweet Corn Chicken and Hot n Sour and the Snacky range
(pasta /noodles in soup) with innovative flavours like Masala Twisty Pasta soup and Thai
Curry Noodle soup.
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This year has also seen the addition of the Indian soup range with lip smacking flavours
inspired by Indian cuisine; these include soups like Tomato Chatpata, Corn Mast Masala,
Veg Hara Bhara, etc.
Whether it is giving the Indian consumer a choice of 17 delicious varieties of soups or
helping her make restaurant like Chinese food at home Knorr has always been at the
forefront in taking the lead and in partnering with the Indian housewife.
The Knorr portfolio has now expanded with yet another launch; the launch of the Indian
Ready to Cook range. Knorr Indian Ready to Cook helps the consumer make her family's
favourite dishes at home and helps her get restaurant like taste at home itself.
Knorr as a brand has always set out to empower homemakers and enable them to make
healthy, wholesome and delicious food options. All Knorr products are healthy,
completely preservative free and low on sodium and cholesterol content.
The brand has also played a key role in helping the Indian housewife in more ways than
one- whether it is through the launch of books like Soups and More, through on ground
events, soup demonstrations and sampling or through its latest venture a website
www.CookitUp.in.
www.CookitUp.in is a one stop shop for every single cooking need and a recipe site to
discover and befriend for life! Whether it is authentic recipes for every occasion, a
powerful search engine that helps you churn out any recipe need with ingredients within
your reach or ideas for resourceful and tasteful use of leftovers in the fridge.
Key facts
Knorr is the largest soup brand in India and has a lions share of the soup market
in India 70%
All Knorr products have no added preservatives and are a healthy choice option.
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Chinese Manchurian
Kwality Wall's
Kwality Walls, the brand with a big heart, offers a range of delightful frozen desserts that
bring smiles to the faces of millions of Indians kids, teens and adults. We do so with
our very popular brands - Cornetto, Feast, Paddle Pop, Selection & our award winning
parlour concept, Swirls.
In a world of stress, denial and restraint, providing moments of daily pleasure to
consumers, through our delightfully delicious products, is our passion. We believe in
spreading happiness and smiles through every cone, cup, stick and tub we sell. Our
biggest satisfaction comes from the look of bliss and happiness of our consumers faces, as
they devour our products.
Our passion is inspired by our love for simple ingredients like Milk, Fruit and Chocolate,
which make our products the best Pleasure Food there is.
Mention ice cream, and most people in India think of Kwality Walls and the big heart.
The brand with the big heart logo is behind many much-loved ice cream classics - from
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indulgent treats like Cornetto & Feast (for teens and young adults), to Moo & Paddle Pop
(for kids), to family favourites like our Selection range of Red Tubs, Italian Gelato and
Viennetta.
Key facts
Unilever is the world's largest ice cream manufacturer with an annual turnover of
more than 5 billion.
Also sold as Algida in Italy & Turkey, Langnese in Germany, Kibon in Brazil,
Streets in Australia and Ola in the Netherlands
Kwality Walls turnover has doubled in the last 3 years. We strive to keep driving
the business at growth rates significantly ahead of market, and become the number
one frozen dessert/ Ice Cream player in India.
Cornetto
Feast
Paddle Pop
Selection
Lipton
Worlds #1 tea brand
Lipton Yellow Label is a premium, full-bodied tea, made out of the finest teas, perfect for
the healthy Indian .Lipton Yellow Label has a unique blend that has high levels of
natural Thiamine, which along with other goodness of tea can help you clear your mind.
The range also contains, Lipton Clear Green tea, which combines the goodness of
antioxidants and purifying effect of water to help cleanse your body naturally.
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Key facts
Lipton is the #1 tea brand in the world
ITC
ITC is one of India's foremost private sector companies with a market capitalization of
nearly US $ 18 billion and a turnover of over US $ 4.75 billion.
ITC is rated among the World's Best Big Companies, Asia's 'Feb. 50' and the World's Most
Reputable Companies by Forbes magazine, among India's Most Respected Companies by
Business World and among India's Most Valuable Companies by Business Today. ITC
also ranks among India's top 10 `Most Valuable (Company) Brands', in a study
conducted by Brand Finance and published by the Economic Times.
ITC employs over 21,000 people at more than 60 locations across India. The
Company continuously endeavors to enhance its wealth generating capabilities in a
globalizing environment to consistently reward more than 3,72,000 shareholders,
fulfill the aspirations of its stakeholders and meet societal expectations. This overarching vision of the company is expressively captured in its corporate positioning
statement: "Enduring Value. For the nation. For the Shareholder."
ITC is not a pure-play FMCG company, since cigarettes is its primary business. It is
diversifying into non-tobacco FMCG segments like foods, personal care, paper products,
hotels and agri-business to reduce its exposure to cigarettes.
PERFORMANCE:
Despite diversification, ITCs reliance on cigarettes is still huge. The tobacco business
contributes 40% to its revenues, and accounts for over 80% of its profit. This cashgenerating business has enabled it to
take ambitious, but expensive bets in new segments and deliver modest profit growth.
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ITCs non-cigarette FMCG business which contributes 15% of its revenues eroded
close to 8% of ITCs profit last year. Its other businesses like hotels and paper together
account for over 20% of ITCs profit. Agri-business, which is its second-largest revenue
earner, contributes one fourth to its revenues, but only 3-4% to its PBIT.
GROWTH DRIVERS:
ITCs backward integration to ensure that its products pass efficiently from the farms to
consumers has helped it to cut down supply and procurement costs. ITCs non-cigarette
FMCG business leverages the large distribution network the company has developed by
selling cigarettes over the years. A rich product mix, along with ramp-up of investments
in its new sectors, will be instrumental in charting ITCs growth path.
FINANCIALS:
During the past three fiscals, ITCs consolidated revenue has seen a CAGR of 22%. Its
profit has grown at just 12% during the same period. ITCs sales and profits have
displayed a secular growth trend. But the pressure of sustaining its new businesses, as
well as higher tax burden on the cigarette business, is straining its profits. After
undeterred growth spanning eight quarters, ITC witnessed a marginal de-growth in net
profit for the trailing four quarters ended June 08.
RISKS:
Increased regulatory clamps on tobacco, along with rising tax burden, pose a business risk
for ITC. So, it has started an ambitious diversification plan, which has its own set of risks.
With its foray into the conventional FMCG space, ITC has entered the high-clutter
branded products market. This will burden its resources in terms of ad spend and brandbuilding. Creating brand recall and building market share in new products are ITCs key
challenges. Export ban and rising crop prices pose a threat for its agri-business, taxing its
margins.
TO SUM IT UP:
ITCs growth story is still evolving. ITC is eyeing the pie which HUL and other FMCG
players currently enjoy. Though risky, the companys business model will pay off in the
long run. ITC has proved its expertise in the cigarettes, hotels, paper and agri-businesses.
Investors who want to bank on its execution ability in FMCG can consider the stock with
a long-term horizon.
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ITC made its entry into the branded & packaged Foods business in August 2001
with the launch of the Kitchens of India brand. A more broad-based entry has been
made since June 2002 with brand launches in the Confectionery, Staples and Snack
Foods segments.
The packaged foods business is an ideal avenue to leverage ITC's proven strengths
in the areas of hospitality and branded cuisine, contemporary packaging and
sourcing of agricultural commodities. ITC's world famous restaurants like
the Bukhara and the Dum Pukht, nurtured by the Company's Hotels business,
demonstrate that ITC has a deep understanding of the Indian palate and the
expertise required to translate this knowledge into delightful dining experiences for
the consumer. ITC has stood for quality products for over 98 years to the Indian
consumer and several of its brands are today internationally benchmarked for
quality.
The Foods business carries forward this proud tradition to deliver quality food
products to the consumer. All products of ITC's Foods business available in the
market today have been crafted based on consumer insights developed through
extensive market research. Apart from the current portfolio of products, several new
and innovative products are under development in ITC's state-of-the-art Product
Development facility located at Bengaluru.
Leadership in the Foods business requires a keen understanding of the supply chain
for agricultural produce. ITC has over the last 98 years established a very close
business relationship with the farming community in India and is currently in the
process of enhancing the Indian farmer's ability to link to global markets, through
the e-Choupal initiative, and produce the quality demanded by its customers. This
long-standing relationship is being leveraged in sourcing best quality agricultural
produce for ITC's Foods business.
The Foods business is today represented in 4 categories in the market. These are:
Staples
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Confectionery
Snack Foods
In order to assure consumers of the highest standards of food safety and hygiene,
ITC is engaged in assisting outsourced manufacturers in implementing world-class
hygiene standards through HACCP certification. The unwavering commitment to
internationally benchmarked quality standards enabled ITC to rapidly gain market
standing in all its 6 brands:
Kitchens of India
Aashirvaad
Sunfeast
mint-o
Candyman
Bingo!
27
Bukhara
Bukhara, a village in Uzbekistan, was a meeting place for the traders from Asia and
Europe. It was also a spot on the fabled Silk Route, a passage commonly used by traders,
scholars and nomads. It was on this route that the unique Bukhara style of cooking was
born.
The Master Chefs of ITC Hotels have whipped up the delectable bite into history with
this cuisine from the North-West Frontier Province with a masterpiece
like Dal Bukhara.
Dal Bukhara
Dal Bukhara is an exquisite culinary treat made from Whole Black
Lentils simmered with prized Indian Spices over a coal fire, for long
hours on end.
Dum Pukht
The art of Dum cooking (cooked in its own juices) traces its origin to the times of the
Nawabs of Awadh who ruled the Northern Provinces of India during the 18th century.
Kitchens of India has currently introduced Mirch Ka Salan in this
range.
Mirch Ka Salan
An extravagant delicacy made from succulent green chillies, delicately
cooked in thick gravy of roasted peanuts, almonds and sesame seeds.
Mughlai Paneer
Fresh cubes of Paneer prepared with khus-khus, ground watermelon seeds
and fine onion paste, spiced with coriander leaves and cardamom powder.
Dakshin
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This cuisine reflects the tradition and culture of the southern Indian peninsula. Kitchens
of India offers you Chicken Chettinad and Chicken Stew:
Chicken Chettinad
Succulent chunks of tender chicken in a dark, spicy paste of curry
leaves and freshly ground pepper. Showcasing the distinctive tastes and
fragrances of the South.
Malabari Chicken Stew
Tender nuggets of chicken in a mild, coconut gravy.
Gharana
A pan-Indian cuisine specially created by ITCs Hotels Master Chefs.
Paneer Darbari
Soft, fresh and juicy cubes of cottage cheese simmered in an aromatic tomato gravy to
create an unforgettable delicacy.
Chicken Darbari
A superb blend of juicy and tender chicken chunks in an aromatic tomato gravy, laced
with butter.
Murgh Methi
Discover the delights of Nawabi cuisine in every serving of Murgh Methi. Tender chunks
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30
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Cubes of raw mango in a thick, aromatic syrup flavoured with cumin seeds.
Mango & Garlic Chutney
Chunks of raw mango mixed with slivers of fresh garlic. A delicious accompaniment with
any meal.
Carrot & Black Pepper Chutney:
Tangy chutney made up of choice carrot slices flavoured with aniseed and
black pepper.
Papaya & Raisin Chutney:
This sweet chutney is made from Papaya slices and papaya pulp with raisins,
kalonji and aniseeds.
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Noormahal Biryani
Minced tender chicken koftas slow-cooked
with saffron flavoured Basmati Rice. From the
Royal kitchens of India.
Bohri Biryani
Delicately spiced chicken layered in Basmati
Rice, enhanced with exotic dry fruits. A feast
fit for the kings.
Yakhni Pulao
Succulent chicken chunks marinated in
creamy yogurt and cooked in saffron
flavoured Basmati rice.
Hyderabadi Mutton Biryani
Delicious mutton pieces cooked to perfection
with cinnamon flavoured Basmati rice form
this Nawabi extravaganza.
:: Kitchens of India Desserts
Kitchens of India royal, authentic Indian Desserts is the perfect way to make any
occasion a celebration. A grand finale to a perfect meal. The Master Chefs of Kitchens of
India bring to you a uniquely packaged range of royal desserts prepared from the finest
of ingredients. Go ahead, re-live the royal experiences.
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The need of frontline military soldiers for light but nutritious food, with an assured long
shelf life was the impulse and the inspiration for the development and fine-tuning of the
retorting process.
Retorting technology was used by the US in its Apollo Space missions. Today it is the
mainstay of US military rations. Retorting is also widely used in packaged foods in
Japan and Europe.
The efficacy and effectiveness of the retorting process depends on the sterilization
process and the retorting pouch.
Sterilization Process
The sterilization process ensures the stability of the Ready-to-Eat foods in retort
pouches, on the shelf and at room temperature. The application of sterilization
technology completely destroys all potentially harmful micro-organisms, thereby
making sure that the food product has a very long shelf life. However, in the current
commercial context, the shelf life is limited to one year.
Retort Pouches
Retort pouches are flexible packages made from multi-layered plastic films, with or
without aluminum foil as one of the layers. Their most important feature is that they are
made of heat-resistant plastics, unlike the usual flexible pouches. This makes the retort
pouches uniquely suitable for the processing of their food contents at temperatures
around 120 degrees Celsius. That is the kind of ambient temperature prevalent in the
thermal sterilization of foods.
The 3-ply laminate consisting of PET/ Al oil / PP is the most common material used in
retort pouches and is the only one used in India. ITC uses 4-layered pouches. The use of
PET or polyester as the outer layer gives the required strength to the pouch. The
aluminum foil serves as a barrier layer ensuring a shelf life of more than one year. The
Nylon layer provides strength to the pouch, reassuring additional shelf life. The
innermost layer of Polypropylene provides the critical seal integrity, flexibility, strength
and taste and odour compatibility with a variety of food products.
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:: Staples
ITC entered the branded Atta market with the launch of Aashirvaad Atta in Jaipur and
Chandigarh on 26th May 2002. The product is now available all over India. Aashirvaad
atta has further built on its leadership position among the National Branded Players with a
market share of 55%.
Aashirvaad promises the Indian housewife the joy of
providing her family with the most delightful home-made
rotis, made from the finest quality atta. ITC uses the
sourcing strength of its e-Choupals to buy wheat directly
from the farmers to deliver happiness to the Indian
consumer Khushiyaan Chun Chun ke (Happiness
handpicked). Aashirvaad is made from finest quality wheat
that ITC has the unique capability to source through its e-Choupal network. Premium
quality atta, made from 100% MP 'sharbati' wheat is also available as Aashirvaad Select
Atta . The wheat for Aashirvaad Superior MP Wheat Atta comes from the plush, fertile
soil of Madhya Pradesh and then blended using the traditional 'chakki-grinding' method to
give the superior, discerning taste.
ITC Foods also aims to delight the consumer through superior and
innovative packaging. The Aashirvaad package is PET Poly, with
the design showcasing the farming process undertaken in the rural
heartland of India in the form of a Madhubani painting. Aashirvaad
Select Atta (5 kg pack) was awarded the World Star Award for
Excellence in Packaging in the Consumer Pack Category. This is
one of the most prestigious awards in the world for Packaging.
ashirvaad Salt
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ITC launched branded packaged salt under the brand name Aashirvaad
Salt on 26th March, 2003. The product is available in grocery stores
around the country.
:: Spices
ITC forayed into the branded spices market with the launch of
Aashirvaad Spices in May 2005. The offering currently consists of
Chilli, Turmeric and Coriander powder in SKUs of 50g, 100g,
200g and 500g each. Aashirvaad Spices, operating in selected
markets of south and east, have spread to a large consumer base
and have emerged as a major player in basic spices in most regional markets.
:: Instant Mixes
Convenience and authentic taste now has a new
name with the Aashirvaad Instant Mix range. This
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range, launched in March '06, now includes Gulab Jamun, Rava Idli, Rice Idli and Rice
Dosa. Aashirvaad Instant Mixes promise the discerning Indian homemaker perfect tasting
dishes, consistently. The Rava idli Mix is available in 500g pack and rests of the products
are available in 200g packs.
: Snack foods
Sunfeast
In July 2003, ITC forayed into the Biscuits market with the Sunfeast range of Glucose,
Marie and Cream Biscuits. Sunfeasts brand essence, "Spread the Smile" connotes
happiness, contentment, satisfaction and pleasure. The mascot Sunny reinforces the
emotional aspects of the brand. In a span of 6 years Sunfeast has launched many new
varieties and has its presence in almost all types of biscuit categories.
Sunfeast Milky Magic
Packed with goodness of milk these deliciously
nutritious crisp and crunchy biscuits are a favorite
among mothers and kids. Milky Magic has the
Magic of 2 - A perfect balance of energy that aids
physical strength and mental ability. These biscuits
strike the right balance of milk and wheat which
helps in an all round development and nurturing of
the child.
38
and
differentiated
platform.
Launched
distinct
flavours
- Butter-Nut,
ingredients
for a sensory
39
the
Strawberry
variant
keeps
creamy
the
Orange Cream
Experience a tangy twist in
biscuits with every Orange cream.
Confectionery
ITC currently has two brands in the confectionery segment - 'mint-o' and 'Candyman'.
'mint-o' was acquired by ITC from Candico in March 2002. ITC re-launched the
40
compressed mint offering, across all major markets in India, with new and improved
product and packaging. It is available in mint flavour with added blue specks to enhance
consumer experience. mint-o Cool Blue - a single mint in a pillow-pack was launched In
November 2007. 'mint-o' is available in 3 sizes rolls of 20 and 6 and singles, capturing
the international essence of youthful cool.
ITC launched 'mint-o Fresh' in October 2004. An active mint deposited candy, mint-o
Fresh is available in a refreshing mint flavour - mint-o Fresh Eucalyptus. Its launch
extended the footprint of the 'mint-o' brand in line with the strategy of adding excitement
and contributing to the growth of the confectionery category. 'mint-o Fresh' is especially
targeted at the adult consumer creating a basket of mint-based products across price
points.
The latest offering in the adult mint confectionery segment is mint-o GOL, in the
`Chews' sub-segment. A brand for young adults, mint-o GOL appeals to both men and
women, offering a never before "refreshing indulgence".
ITC launched the 'Candyman' range of confectioneries in August 2002. Led by
the'Candyman Fruitee Fun' range of assorted fruit flavours ('Wild Banana',
'Pineapple Punch', 'Orange Josh' and 'Mango Delite'), the 'Candyman' portfolio now
includes deposited candy products like 'Candyman Butterscotch
Licks' and 'Candyman clairs'(Choco flavoured as well as Vanilla Cream centre inside
a Butterscotch outer shell). The coffee toffee segment also saw the successful launch
of 'Candyman Cofitino' in November 2005.
The brand was further strengthened with the launch of 'Candyman Natkhat Mango' and
'Candyman Maha Mango'. In line with the strategy to provide innovative flavours and
formats to consumers, Candyman Mango Licks was launched in June 2007, Candyman
Lacto Creme Centre in June 2008 and Candyman Toffichoo Strawberry in early
2009.Candyman Lacto Creme Center is the only Lacto with a yummy cream filled
center, and Candyman Toffichoo is a luscious fruit flavored soft and chewy toffee.
The 'Candyman' range of confectionery is targeted at fun-filled, naughty kids who seek
a delightful candy experience through a range of candy types and flavours.
41
Snack foods
Bingo!
The launch of Bingo! in March 2007 marked ITC's foray into the
fast growing branded snack foods segment. Bingos portfolio
includes an array of products in both Potato Chips & Finger
Snacks segment.
Bingo! is positioned as a youthful and innovative snack, offering the consumers a choice
of flavours that are fast becoming popular.
The Potato Chips offerings comprise the everpopular Salted, Masala and Tomato flavours, as well as some innovative variants inspired
by the snacking habits of different parts of the country like Chatkila Nimbu Achaar.
42
The Finger Snacks segment, the innovative 'khakra inspired' Mad Angles has become an
instant hit among consumers and is available in 3
flavours - Tomato Mischief, Chilli
Dhamaka and Achaari
Masti.
Finger Snack Hatke Jhatke, appropriately shaped like a wave, takes Bingo!s philosophy
of combinations forward with two exciting flavours - Funky Masala & Tomato Twist.
43
DISTRIBUTION SYSTEM
44
45
EVOLUTION OF HULS DISTRIBUTION MODEL:To meet the ever-changing needs of the consumer, HUL has set up a distribution network
that ensures availability of all their products, in all outlets, at all items. This includes,
maintaining favorable trade relations, providing, innovative incentives to retailers and
organizing demand generation activities among host of other things.
HUL has followed a strategy of building its distribution channels in a transitional manner;
and in different successive phases of the evolution of its distribution system, has
penetrated well into the rural market.
Phase I
The first phase of the HUL distribution network had wholesalers placing bulk orders
directly with the company. Large retailers also place direct orders, which comprised
almost 30 percent of the total orders collected.
The company salesman grouped all these orders and placed an indent with the
Head Office. Goods were sent to these markets, with the company salesman as the
46
consignee. The salesman then collected and distributed the products to the
respective wholesalers, against cash payment, and the money was remitted to the
company.
Phase II
The focus of the second phase, which spanned the decades of the 40s, was to
provide desired products and quality service to the companys customers. In order
to achieve this, one wholesaler in each market was appointed as a Registered
Wholesaler, a stock point for the companys products in that market. The
company salesman still covered the market, canvassing for orders from the rest of
the trade. He would then distribute stocks from the Registered Wholesaler through
distribution units maintained by the company. The Registered Wholesaler was
given a margin of 1 per cent to cover the cost of warehousing and financing the
stocks held by him. The Registered Wholesaler system, therefore, increased the
distribution reach of the company to a larger number of customers.
Phase III
The highlight of the third phase was the concept of Redistribution Stockiest
(RS)
who
replaced
the
REGISTERED
WHOLESALERSs.
The
The second characteristic of this period was the changes brought in as the
company realised that the REDISTRIBUTION STOCKIST would be able to
provide customer service only if he was serviced well. This knowledge led to the
establishment of the Company Depots system. This system helped in
transshipment, bulk breaking, and acted as a stock point to minimize stock-outs at
the REDISTRIBUTION STOCKIST level.
In the recent past, .significant change has been the replacement of the Company
Depot by a system of third party; the Carrying and Forwarding Agents (C&FAs).
The C&FAs act as buffer stock-points to ensure that stock-outs did not take place.
The C&FA system has also resulted in cost savings in terms of direct
47
transportation and reduced time lag in delivery. The most important benefit has
been improved customer service to the REDISTRIBUTION STOCKIST.
Operation Bharat HULs Rural Distribution Effort:
talc)
products
along
with
educational
leaflets
audio-visual
Indirect Coverage :
Under the Indirect Coverage (IDC) method, company vans were replaced by vans
belonging to distribution Stockiest, which serviced a select group of neighbouring
markets.
Operation Harvest:
another 3.6 million shops in rural areas. Depending on their business objectives,
marketers use varying definitions for what is rural. Whatever be the case, to
extend their reach, marketers begin by seeding the new territory, mostly through
a brand awareness exercise. As HUL demonstrated with Operation Harvest, this
exercise is best done through van operations. During this exercise, vans from HUL
and its distributors did the rounds of 30,000 villages giving promotional packs,
showing products ads and identifying key retail and distribution points.
Cinema Van Operations:
The Redistribution Stockiest typically funds these. Cinema Van Operations have
films and audio cassettes with song and dance sequences from popular films, also
comprising advertisements of HUL products. But over a period of time, van
operations (usually run by the distributor or a third party) have also been used to
regularly service retailers in these smaller markets rather than only making
contract with the end consumer. These successive Operations have enabled the
company far deeper penetration levels than other companies. HUL recognized
early in its rural distribution initiative that market share would be created only
when demand is built up through awareness, trial and consistent availability. The
company literally had to build up the market village by village in its rural
initiative. Cost-effective distribution solutions were as first attempted by HUL,
and many other companies are veering around to that option today. It has been
working well for HUL, so others are beginning to experiment with it.
Project Shakti : Rural India is spread across 627,000 villages and possesses a serious distribution
challenge for FMCG Cos.
HLL has come up with a unique and successful initiative wherein the women from the
rural sector market HLL products, and hence, are able to reach the same wavelength
as of the common man in village.
Apart from product reach, the initiative also creates brand awareness amongst the
lower strata of society.
49
Project Streamline : HUL initiated a Streamline initiative in 1997- cater to the needs of the inaccessible
market
Focuses on extending distribution to villages with less than 2000 people
Rs Initiative : Launched in 2001
Connecting Redistribution Stockiest (RSs) through an internet based system
Account for about 80% of the company's turnover
RS Net is one of the largest B2B ecommerce initiatives ever undertaken in India.
The powered system has been implemented to supply stocks to redistribution stockiest
on a continuous replenishment basis.
50
51
ITC uses FIFO method to reduce the wastage of goods due to expiry.
52
They also keep the good on constant move from low sales area to high sales area.
The company collects all the expired goods four times a year, and destroys them.
Retailers must return expired or damaged products within six months after the
date of expire.
Adjustment for them is done in three months time.
ITC provides their retailers with racks, hangers, etc to display the products.
The benefits received by the retailers depend upon their sales volume and also the
location of their shops.
ITC has hired IMRB to do the market research.
ITC Foods utilizes distribution network efficiently
Distributes products to more than a million outlets across the country
Distribution centers located in the major states
e- choupals - distribution channel where the farmers are linked to the company
Help retailers manage their stock better
ERP based logistics link-Distributers-Warehouses-Marketing branches to
its head offices and factories
Developed a companywide hybrid network called Project Infoben
53
SWOT ANALYSIS
HUL:STRENGTHS:
54
Agri-Business,
Packaged
Foods
&
Confectionery,
Information
Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other
FMCG products.
ITC's Agri-Business is one of India's largest exporters of agricultural products.
WEAKNESSES:
The company's original business was traded in tobacco. ITC stands for Imperial
Tobacco Company of India Limited. It is interesting that a business that is now so
involved in branding continues to use its original name, despite the negative
connection of tobacco with poor health and premature death.
To fund its cash guzzling FMCG start-up, the company is still dependant upon its
tobacco revenues. Cigarettes account for 47 per cent of the company's turnover, and
that in itself is responsible for 80% of its profits. So there is an argument that ITC's
move into FMCG (Fast Moving Consumer Goods) is being subsidized by its
tobacco operations. Its Gold Flake tobacco brand is the largest FMCG brand in
India - and this single brand alone holds 70% of the tobacco market.
OPPORTUNITIES:
Core brands such as Aashirvaad, Mint-o, Bingo! And Sun Feast (and others) can
be developed using strategies of market development, product development and
marketing penetration.
55
ITC is moving into new and emerging sectors including Information Technology,
supporting business solutions.
E-Choupal is a community of practice that links rural Indian farmers using the
Internet. This is an original and well thought of initiative that could be used in other
sectors in many other parts of the world. It is also an ambitious project that has a
goal of reaching 10 million farmers in 100,000 villages.
The company researched the tastes of consumers in the North, West and East of
India of atta (a popular type of wheat flour), then used the network to source and
create the raw materials from farmers and then blend them for consumers under
purposeful brand names such as Aashirvaad Select in the Northern market,
Aashirvaad MP Chakki in the Western market and Aashirvaad in the Eastern market.
This concept is tremendously difficult for competitors to emulate.
Chairman Yogi Deveshwar's strategic vision is to turn his Indian conglomerate into
the country's premier FMCG business..
THREATS:
The obvious threat is from competition, both domestic and international.
ITC's opportunities are likely to be opportunities for other companies as well.
Therefore the dynamic of competition will alter in the medium-term. Then ITC will
need to decide whether being a diversified conglomerate is the most competitive
strategic formation for a secure future.
The laws of economics dictate that if competitors see that there is a solid profit to be
made in an emerging consumer society that ultimately new products and services
will be made available. Western companies will see India as an exciting opportunity
for themselves to find new market segments for their own offerings.
Duplicate items are available in abundance at much lesser rates. This affects the
Company financially and adversely affects its goodwill.
56
57
RESEARCH
METHODOLOGY
58
Research Methodology:
The final project is mainly based on Primary as well as Secondary data. The project was
based on the research to study and assess the best Distribution practices for HUL or ITC
and to make comparison in food products of both the company from the customer
prospective.
The types of research used are: 1.
Exploratory Research:In well establish fields of study, hypothesis usually are drawn from ideas developed or
glimpsed in previous research studies or derived from theory.
Research could be used to determine if the hypothesis was correct. Too little is
- Descriptive Research
-
Secondary Data
Survey Method
59
DATA COLLECTION
In this research study I used both type of data:
Primary data
Secondary data
PRIMARY DATA:
The primary data was collected by approaching the individuals with a Questionnaire and
was filled after making them understand the use of the information. This was done to
make sure that the information provided is true and unbiased.
The Techniques which I used to collect these data are as follows:
Questionnaire
concerned with a request of answer the questions and return the questionnaire consists of
a number of questions printed or typed in a defined order on a form or set of forms.
SECONDARY DATA:Secondary data are those data which are printed and which already been collected by
someone else and which have already been passed through the statistical process.
The secondary resources used in the study are:
Books ,
Journals
Magazine Articles
Internet Website
POPULATION: The population for the survey was taken to be the current and potential
customer of both the company. Only those individuals were taken under consideration
those are using the products of any of this two company. I selected the area like
Sahibabad, Raj Nagar, Mohan Nagar in Ghaziabad and Okhla and Dwarika in New Delhi.
SAMPLE SIZE: Since the targeted population were individuals it was not possible to
segregate the population and take the specific sample from it, hence random sampling
60
was done and then the collected data was regrouped as per requirements. The data was
collected from the random sample of 250 people in order to get the accurate results.
In my research I used the method of probability sampling. Probability sampling is
based on random selection concept. It gives equal probability of getting in to sample.
Research Design:
A research design is the arrangement of conditions for collection and analysis of in a
manner that aims to combine relevance to the research purpose with economy in
procedure.
The research design have been based on the sampling design and observational Design.
Research design is needed because it facilitates the smooth sailing of the various
research operations.
The dissertation is prepared with the help of exploratory research design.
61
62
INTERPRETATION:
The survey shows that the number of respondent who use the Hindustan Uni Lever
(HUL) product were 44 % and the number of respondent who use the Imperial Tobacco
Company (ITC) Product were 36 % and rest were only 20 %. Thus the majority of
Respondent were the user of HUL. This can be due to several reasons like, because of Its
Large Portfolio, Brand Name, Quality or Rice of the Products.
63
INTERPRETATION:
The survey shows hat the majority of Respondent was satisfied with the quality of the
Food Products of both the Company (HUL and ITC).
Only 11% of the Respondent does not responded about the quality of the products while
18% of respondent were disagree with the quality of the product .So, Company should
focus on the quality and should bring about the changes in order to make the existing
consumer use the product also to attract the new customers.
64
INTERPRETATION:
The survey shows that the majority of respondent were satisfied with the Price of the
Food Products of both the Company (HUL and ITC) i.e. about 62%.
Only 9% of the respondent does not responded about the Price of the products which
shows that they are not giving much importance to price, while 13% of respondent were
strongly disagree with the price of the product .So, Company should set the price of the
product as such that the Consumer should be satisfy with it.
65
INTERPRETATION:
The survey show that most of the respondent purchasing of product depends on the
advertisement which means the Company has to advertise its product regularly, In order
to keep the product update in their customer minds and to make them aware about the
change in the products. Only about 32 % respondents were not agree that the
advertisement does affect the purchasing power to them. The number of respondent who
does not responded to this question was only 9 %.
66
INTERPRETATION:
The survey shows that majority of respondent had got the knowledge about the product of
the Company through the different tools like Television, Newspaper and Hoarding, used
by the Company. So, the Company should regularly promote its product through these
tools to make them aware about the product. Thus promotion is playing role in selling the
products of the Company.
67
INTERPRETATION:
The survey shows that majority of customer of both the Company are not ready to switch
to other Company product if they are provided with the same quality of product by the
other Company. Only about 26 % of the respondent agrees that they will switch to other
Company if the products are provided with the same quality at low price.
68
INTERPRETATION:
The survey shows that brand plays an important role in selling the product. As we know
the name sales so if the Company has good name among its customer then customer
make less effort in taking decision to purchase the product. Also it shows that customer is
loyal to its brands in purchasing the product. Only about 28% of the respondents were
giving less importance to the brands but about 50% of the respondents were giving
importance to the brands.
69
INTERPRETATION:
The survey shows that highest percentage of the respondent use the product of same
Company (HUL or ITC) on the regular basis. Only 28 % of the respondent said that they
sometime use the product of other Company which is good for the Company also the
number of respondent who does not reply to this was very less i.e. 6%.
70
INTERPRETATION:
The survey shows that the products were available in different area like Malls, Grocery
Shop, and Confectionary. Which shows that the respondent do not get shortage of product
in this area results that the Company is taking much care regarding the availability of its
product. Only few respondents were not agreeing with the availability of product in this
area and feels that there was shortage of products. So, Company should check regularly
that there should not be any shortage of product in this area.
71
DESCRIPTIVE WORK
72
FANCY STORE
GM : GENERAL MERCHANT
KR : KIRANA/GROCER
OTH: OTHERS
CHANNEL SEGMENT
BA :
BEAUTY ADVISER
MASS RETAIL
CH
CHEMIST
FG
FAMILY GROCER
73
74
The uppermost display window must not be 8 ft above the ground level of the
outlet.
Ideally all the display windows should be between 4-8 ft from the floor.
Criteria for an outlet to qualify for SVS is must have 8 window displays.
News corner windows are hired and changed every 21-30 of the month and
give information about new product inventions and offerings
News corner windows should be ideally 1-2 ft above the counter top of the
outlet.
A table top listing offers and new product introductions should be there on the
counter tops
Cut outs to enhance the effectiveness of window displays (Girl cut outs,
Products are displayed according to the templates designed by the brand
team every month and a copy of the same is sent to the respective distributors and
merchandisers accordingly. From 1-20 of each month windows across the territory
are maintained and supervised by the merchandisers and the company personnel.
75
Supply Chain
The primary objective of supply chain management is to fulfill customer demands
through the most efficient use of resources, including distribution capacity,
inventory and labor
Activities/Functions
Supply chain management is a cross-functional approach to managing the
movement of raw materials into an organization and the movement of finished
goods out of the organization toward the end-consumer. As corporations strive to
focus on core competencies and become more flexible, they have reduced their
ownership of raw materials sources and distribution channels. These functions are
increasingly being outsourced to other corporations that can perform the activities
better or more cost effectively. The effect has been to increase the number of
companies involved in satisfying consumer demand, while reducing management
control of daily logistics operations. Less control and more supply chain partners
led to the creation of supply chain management concepts. The purpose of supply
chain management is to improve trust and collaboration among supply chain
partners, thus improving inventory visibility and improving inventory velocity.
Several models have been proposed for understanding the activities required to
manage material movements across organizational and functional boundaries.
SCOR is a supply chain management model promoted by the Supply-Chain
Council. Another model is the SCM Model proposed by the Global Supply Chain
Forum (GSCF). Supply chain activities can be grouped into strategic, tactical, and
operational levels of activities.
Strategic
channels
for
critical
information
and
operational
76
Tactical
Milestone Payments
Operational
Daily production and distribution planning, including all nodes in the supply
chain.
77
Order promising, accounting for all constraints in the supply chain, including
all suppliers, manufacturing facilities, distribution centers, and other
customers.
Distribution
'Distribution' is one of the four aspects of marketing. A distributor is the
middleman between the manufacturer and retailer. After a product is manufactured
by a supplier/factory, it is typically stored in the distributor's warehouse. The
product is then sold to retailers or customers. The other three parts of the
marketing mix are product management, pricing, and promotion
Traditionally, distribution has been seen as dealing with logistics: how to get
the product or service to the customer.
Selling direct
Retailer
Wholesaler
Distribution channels may not be restricted to physical products. They may be just
as important for moving a service from `producer' to consumer in certain sectors;
since both direct and indirect channels may be used. Hotels, for example, may sell
78
their services (typically rooms) direct or through travel agents, tour operators,
airlines, tourist boards, centralized reservation systems, and so on.
There have also been some innovations in the distribution of services. For
example, there has been an increase in franchising and in rental services - the
latter offering anything from televisions through to DIY tools. There has also been
some evidence of service integration, with services linking together, particularly
in the travel and tourism sector: for example, links now exist between airlines,
hotels and car rental services. In addition, there has been a significant increase in
retail outlets for the service sector; outlets such as estate agencies (real estate
agents) and building society offices, for example, are crowding out the traditional
grocers and greengrocers from the high street (major shopping areas).
Channel members
Distribution channels can thus have a number of levels. Kotler defined the
simplest level that of direct contact with no intermediaries involved, as the 'zerolevel' channel.
The next level, the 'one-level' channel, features just one intermediary; in consumer
goods a retailer, for industrial goods a distributor, say. In recent years this has been
the level which, together with the zero-level, has accounted for the greatest
percentage of the overall volumes distributed in, say, the UK; although the very
elaborate distribution systems in Japan are at the other end of the spectrum, with
many levels being encountered even for the simplest of consumer goods.
In the UK, a second level, a wholesaler for example, is now mainly used to extend
distribution to the large number of small, neighbourhood retailers.
Channel structure
To the various `levels' of distribution, which they refer to as the `channel length',
Lancaster and Massingham also added another structural element, the relationship
between its members:
79
does not share many characteristics with other channel transactions, each one
being unique.
Overall strategy
Channel strategy
Channel management
The channel decision is very important. In theory at least, there is a form of tradeoff: the cost of using intermediaries to achieve wider distribution is supposedly
lower. Indeed, most consumer goods manufacturers could never justify the cost of
selling direct to their consumers, except by mail order. In practice, if the producer
80
is large enough, the use of intermediaries (particularly at the agent and wholesaler
level) can sometimes cost more than going direct.
However, many suppliers seem to assume that once their product has been sold
into the channel, into the beginning of the distribution chain, their job is finished.
Yet that distribution chain is merely assuming a part of the supplier's
responsibility; and, if he has any aspirations to be market-oriented, his job should
really be extended to managing, albeit very indirectly, all the processes involved
in that chain, until the product or service arrives with the end-user. This may
involve a number of decisions on the part of the supplier:
Channel membership
Channel motivation
Channel membership
1. Intensive distribution - Where the majority of resellers stock the `product'
(with convenience products, for example, and particularly the brand leaders in
consumer goods markets) price competition may be evident.
2. Selective distribution - This is the normal pattern (in both consumer and
industrial markets) where `suitable' resellers stock the product.
3. Exclusive distribution - Only specially selected resellers (typically only one
per geographical area) are allowed to sell the `product'.
Channel motivation
It is difficult enough to motivate direct employees to provide the necessary sales
and service support. Motivating the owners and employees of the independent
organizations in a distribution chain requires even greater effort. There are many
devices for achieving such motivation. Perhaps the most usual is `bribery': the
supplier offers a better margin, to tempt the owners in the channel to push the
product rather than its competitors; or a competition is offered to the distributors'
sales personnel, so that they are tempted to push the product. At the other end of
the spectrum is the almost symbiotic relationship that the all too rare supplier in
the computer field develops with its agents; where the agent's personnel, support
as well as sales, are trained to almost the same standard as the supplier's own staff.
81
82
To ensure that products has availability, visibility and freshness across all
serviced outlets
To promote confidence and trust among sales force and maximize motivation
and commitment
83
There can be separate shelves for soap and shampoo and they can be
arranged as per the various brands.
Paid displays
Unpaid displays
Leveraging scale and building expertise to service Modern Trade and Rural
Markets.
84
Revamping of its sales organisation in the rural markets to fully meet the
emerging needs and increased purchasing power of the rural population
Implementation of supply chain system that connects stockists across the country,
and also includes a backend system connecting suppliers, all company sites and
stretching right up to stockists. IT tools have been deployed for connectivity
across the extended supply chains. Backend processes have been combined into a
common Shared Service infrastructure.
Launching of Project Shakti through which the company is able to extend its
operations in villages. HUL has also included several NGOs and state
governments as the initiative helps rural women to improve their financial
position.
Launching of HUL Network to leverage the channel of direct selling by presenting
customised offerings in 11 home and personal care and food categories. Started in
2003, it already has a base of 300,000 consultants across the country.
Finding out Innovative ways to reach out to its consumers, particularly in rural
areas by leveraging nonconventional media like wall paintings, cinema vans,
weekly markets (haats), fairs and festivals. .
Launching the Unicare scheme with upmarket pharmacies and retailers to sale its
premium brands.
Undertaking several initiatives for traditional channels in order to improve its
capabilities at the frontend by developing skills for stockists' sales force. Under
'Project Dronacharya', the FMCG major continuously imparted training to over
10,000 stockist salesmen.
Launching of several promotional schemes for existing wholesalers and
distributors. For instance, it has started the Vijeta Rishta Jeet Ka scheme last
year to provide a platform for the wholesaler and HUL to grow the business by
earning points and redeeming them.
o .
85
HUL
Deflationary cycle
Margin myopia
ITC ITC
ITC
Business Model
Growth cycle
3Cs impact
Ability to call
shots
Absence of growth drivers
50% of revenues from
highly stagnated markets
Personal product - the
only growth driver
Virtual absence in foods
Growth drivers
86
FINDINGS
87
FINDINGS
The findings of this report are: HUL has a large portfolio in food products than that of ITC.
The distribution channel of HUL is better than that of ITC
Both the company are following different project to target the rural customer
Majority of the respondent use the product of HUL as compare to that of ITC.
Customers of HUL are much more loyal to the product and only few respondents
were ready to switch to other companys product if they are provided with the
same quality of product at low price.
Customer of HUL and ITC are satisfied with their product, product quality and
product price .
Most of the respondents were aware about the food product of both the company.
Advertisement and other promotional tool play an important role in increasing the
sale of products.
ITC salesmen carry an order book, while HUL salesmen carry HHT (hand held
terminals).
88
LIMITATIONS
89
LIMITATIONS
Limitations which found by me during the research: The sample size under study was relatively large.
Respondents were not ready to disclose the details.
A more extended geographical sample may show greater difference in perceptions.
Secondary data collected from various website are not updated.
The data collected cannot be considered as 100% accurate.
Limitation of time to complete the report.
The analysis so done cannot be regarded as the final as change is the only constant
thing which happens.
90
CONCLUSION AND
SUGGESTIONS
CONCLUSION
91
Both the company are strong player in the FMCG sector, and has different foods
productin there portfolio . The main food product of HUL are like tea- 3 rose, red
lebel,taaza, taj mahal lipton,coffe- bru, kissan ketup,jams and kissan amaze brainfood,
knorr,ice cream- kawality walls , anupurna salt .where as the food product of ITC are like
kitchen of india-chutneys , biryani,desserts etc, Ashirvaad - atta, salt, sun feast biscuitmilk magic, marie light, golden bakery, dark fantasy, dream cream, sweet n salt etc, minto, Candyman, bingo!.
Doing this work also help me to understand the different distribution
channel used by both the company HUL and ITC and the different intermediaries which
are present in the distribution channel. also explain the strategy they have made to target
the rural customer.HUL has started the project like Shakti, operation Bharat, Operation
harvest etc and ITC has started the project like e- Choupal,etc to target the rural people
because this area is a untapped market and is a very good market to increase the sale by
the company.
This report also helped me to understand the demand and supply
relation in order to overcome the shortage of product in the market and to control the
extra flow of product in the market when should the order of the product should be made
and at what quantity .
This report also help to understand the position of both the company
in the market, as we know that HUL is the market leader in FMCG product and ITC is the
growing company in this sector. But because of the large number of the product in its
portfolio HUL is in much stronger position than that of ITC . HUL is not present in the
snack foods but ITC is present in that, similarly HUL is the market leader in tea and
coffee but ITC is not present in that sector. Thus there are some sector in food product
where anyone is missing but as HUL is mainly involved in the FMCG sector for the last
many years so its position is better than that of ITC.
The study also says that consumer of both the company are satisfied with the
product of each company but consumer of HUL are much more brand loyal than that of
consumers of ITC.
Hence, working on this topic help me to learn a lot about the distribution channel , food
product of HUL and ITC , and was a good learning platform for me.
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SUGGESTIONS
According to my research, companies have to do following: Company should make their distribution system better.
Distributional system can be improved by proper supply according to
demand.
Company should provide different benefits in products to their customer.
Company should promote its product through different tools to make
consumer aware about the product and its update.
Company should engage in doing some of social responsibility work
towards the society.
Company should bring continuous change in its product with the change in
time.
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BIBLIOGRAPHY
Books:
WEBSITES:
www.itcportal.com
www.hul.com
www.thehindubusinessline.com
www.kitchensofindia.com
www.aashirvaad.com
www.bingeonbingo.com
www.mycandymanclub.com
www.sunfeastharabanao.co
www.samsmba.blogspot.com/2007/10/case-study-hindustan-unilever.html
www.business-standard.com/india/storypage.php?autono=338610&chkFlg=
www.thebetterindia.com/tags/hindustan-unilever-limited/
94
ANNEXURE
QUESTIONAIRE:
NAME:
GENDER:
AGE:
INCOME:
DEAR SIR,
I AM CONDUCTING A SURVEY ON THE FOODS PRODUCTS OF HUL AND ITC. KINDLY SPARE
SOME OF YOUR VALUABLE TIME TO GO THROUGH QUESTIONNAIRE. THE INFORMATION
PROVIDED BY YOU WILL BE KEPT CONFIDENTIAL AND ONLY BE USED FOR ACADEMIC
PURPOSES.
B).DISAGREE
C).CANT SAY
D).AGREE
E).STRONGLY
OVERALL MEASURES
1)YOU USE THE FOODS PRODUCT OF WHICH COMPANY ?
A ) HUL
B ) ITC
C ) OTHERS
Q2) QUALITY OF FOODS PRODUCT SATISFY YOUR FUNCTIONAL AND
EMOTIONAL NEED?
A
B
C
D
E
Q4) PRICE OF FOODS PRODUCT IS COMPERATIVE IN MARKET?
A
B
C
D
E
Q5) ADVERTISEMENT OF PRODUCT INFLUENCES YOUR S PURCHASING
DECESION?
A
B
C
D
E
NEWSPAPER/MAZAGINES:
HOARDINGS:
95
PACKAGING
THANK YOU .
96